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Disney+ Spending “Real” Money On Content

As more information on Disney’s new streaming service, Disney+, starts to slip out ahead of April’s demonstration, it’s becoming obvious that Disney is looking to heavily invest in content to compete with other companies like Netflix.

According to a report from Variety, RBC research is expecting to spend a projected $23.8 billion for 2019, or $16.4 billion excluding sports-related properties. Disney’s total spending to fill its pipeline amounts to 22% of the estimated $107 billion in global content spending among the largest media companies. AT&T and Netflix are next on the list with $14.3 billion and $14 billion, respectively, per RBC.

RBC Capital Markets senior media analyst Steven Cahall. He estimates the company will devote about $500 million to original programming for Disney Plus in 2019. “Disney spends more on content than anyone else globally. It has decades of experience in making excellent content, it has a huge balance sheet with low leverage and it’s a brand that’s known the world over”.

Most of the financial focus on Disney+ content is reportedly going towards upcoming Marvel and Star Wars content, “They’re spending real money on those shows,” says one top TV agent. But the issue with this is that other productions are offering less lucrative deals than comparable projects would likely command at Netflix or Amazon, since the aftersale market for selling these shows isn’t there anymore.

However Disney is still looking at Original movies to be a big part of the Disney+, with budgets ranging from $20 million to $60 million.

Investors are hoping to see more details about Disney’s investment in its Direct-to-Consumer operations including Hulu and Disney+ will be coming on February 5th, when the next quarterly information is released.